Evidence of meeting #95 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was see.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Jean-Denis Fréchette  Parliamentary Budget Officer, Library of Parliament
Jason Jacques  Director, Economic and Fiscal Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
Mostafa Askari  Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament
Alex Smith  Financial Analyst, Office of the Parliamentary Budget Officer, Library of Parliament

8:45 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Colleagues, I'll call the meeting to order and welcome our guests.

Monsieur Fréchette, thank you very much for being here.

Colleagues, this is a televised meeting. Before we begin, I have just a couple of quick notes. We may be interrupted by bells this morning. I'm not 100% sure on that, but I have a sense that we'll probably hear the bells ringing at about a quarter after 10 or so. Since we're next door to the chamber, if we still have questions of our guests, we have the ability to stick around here a little longer rather than just leave immediately when the bells start ringing. I'll do a little consensus building at that time and see what we need to do.

Since this will be in all probability our last meeting before the summer, I want to thank each and every one of you for all the hard work you've performed on behalf of Canadians and your own taxpayers. I particularly want to acknowledge all the hard work you did with our most recent report, which we tabled last week, on the whistle-blower protection act. We hadn't had a report like that for 10 years, as all of you know. I have heard, as I'm sure you have heard from many of your constituents and many public service holders themselves, that an update of that act was desperately needed. We had many, many government employees and public servants who were feeling shut out of the process. They felt that they couldn't really go forward to their supervisors, in some cases, with evidence or suggestions of wrongdoing, for fear of reprisal. I think the work you all did on drafting that report, which we've tabled, will go a long way in comforting a lot of our public servants and in fact encouraging them to come forward with evidence of wrongdoing, should they see it in the workplace.

This is, I think, a very memorable—I won't say “historic”, as I'm not prone to hyperbole—and good piece of work that all of you did. I give my thanks to each and every one of you for that. It's going to stand the test of time, I believe. We'll see what happens in five years when we do another review. Congratulations to each and every one of you. You should be proud of the work you did.

Colleagues, I also just want to mention to you that our clerk, Philippe, will not be with us come the fall. This is his last meeting. It's been 18 months since this committee began sitting, and I think we will now be going through our fourth clerk, which I take as a direct reflection of my abilities as your chair.

8:45 a.m.

Some hon. members

Oh, oh!

8:45 a.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Is it us?

8:45 a.m.

Conservative

The Chair Conservative Tom Lukiwski

It kind reminds me of my love life when I was younger, when the woman always used to say, “It's not you, it's me. That's why I'm leaving.”

Philippe is going on to bigger and better things. I know we all wish him well.

Thank you for all of the hard work you've done.

8:45 a.m.

Some hon. members

Hear, hear!

8:45 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Of course, I will never ignore, and nor should I, our two hard-working analysts. Both Audrey and Raphaëlle have done exemplary work over the course of the last several months. Frankly, without them, we wouldn't be tabling reports in the House of Commons as comprehensively as we have been.

Ladies, thank you very, very much for all your work.

8:45 a.m.

Some hon. members

Hear, hear!

8:45 a.m.

Conservative

The Chair Conservative Tom Lukiwski

With that, Monsieur Fréchette, we will have your opening statement. We'll continue with a round of questioning until we are interrupted by bells. Hopefully, sir, we can get the majority, if not all, of the meeting under our belts by that time.

The floor is yours, sir.

8:45 a.m.

Jean-Denis Fréchette Parliamentary Budget Officer, Library of Parliament

Thank you, Mr. Chair.

You made a good segue when you mentioned the fall. Should Bill C-44 be passed in the next few hours, all of the PBO team members are looking forward to working with your committee, which is one of the four committees mentioned in the PBO legislation. We're looking forward to that.

Mr. Chair, Mr. Vice Chair, members of the committee. Thank you for the invitation to appear before you to discuss the estimates process and our recent reports on the estimates.

Today, I am joined by Mostafa Askari, Assistant Parliamentary Budget Officer, and by Jason Jacques and Alex Smith. I feel that Mr. Jacques and Mr. Smith are members of quite a small group of experts who have been following the evolution of the budget process for many years.

Of course, I include in that group Brian Pagan and his colleague Marcia Santiago, who are both not unknown to your committee.

As you know, in October 2016, the Treasury Board Secretariat released its vision for estimates reform. It rests on four pillars: aligning the estimates with the budget, scope and accounting, vote structure, and finally, the departmental plans and results reports.

We welcome the government's efforts to enhance Parliament's role in financial scrutiny. To help parliamentarians examine the government's proposals, we prepared a document outlining issues to be considered when reforming the business of supply. We have also been monitoring the implementation of the government's reforms through our reports on the estimates. While we have observations on each of the four pillars, I will focus on the government's proposal to improve the alignment of the budget and the main estimates by delaying the main estimates—originally until May 1, and now until April 16 based on a recent motion that would amend Standing Order 81. We will come back to that standing order during the question period, if you want.

As the inclusion of budget measures in the spring estimates is an indication of whether delaying the main estimates will lead to alignment with the budget, we tracked the number and value of budget 2017 spending measures in supplementary estimates (A) 2017-18. We found that only 44% of the additional funding allocated in budget 2017 for 2017-18 was included in the supplementary estimates (A). This is a decrease from the previous year, when 70% of the budget funding was included in supplementary (A)s 2016-17.

Given the limited number and value of budget measures that were included in supplementary estimates (A) 2017-18, we are concerned that the government's proposal to delay the main estimates may not result in meaningful improvement in the alignment of the budget and the main estimates.

It is worth noting that, in 2008, the government began tabling spring supplementary estimates with the stated intention of facilitating a closer alignment of the estimates to the budget. As the number of budget measures included in the spring supplementary estimates has varied considerably, it could be concluded that delaying the main estimates would result in similar challenges.

Our examination suggests that successfully aligning the budget and the estimates will require substantial reforms to Finance Canada's and the Treasury Board Secretariat's budgetary approval processes. Thus, parliamentarians may wish to wait for additional details regarding the government's plans to streamline and align those processes before changing the timing of the main estimates.

To help parliamentarians hold the government to account for the implementation of its budget plan, we also decided to track spending and tax measures from announcement in the budget to parliamentary approval through appropriation and budget implementation bills.

As a result of that exercise, we found a number of budget 2016 spending measures, 44% of them, line up with items included in the 2016-17 supplementary estimates. However, many spending measures had more funding or less funding than indicated in the budget, or were simply not funded through the supplementary estimates in 2016-17.

On that basis, we concluded that there is often no clear line of sight between budget spending announcements and their implementation. The different presentation, wording, and accounting methodology makes it challenging to align budget spending measures with items included in the estimates, and it is not possible to track spending on most budget measures beyond the first year or what was actually spent on specific measures. It is thus very difficult for parliamentarians to follow the money and hold the government to account for implementing its fiscal plan as outlined in the budget.

We believe that the government may be able to address some of these challenges by preparing and presenting its budget and estimates concurrently and using a more consistent method of presentation, as was recommended by this committee in 2012.

We have provided copies of the documents I have mentioned to the clerk.

My colleagues and I would be happy to respond to any questions you may have regarding our analyses, as well as the government's estimates process.

Thank you very much, Mr. Chair.

8:50 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you very much, Monsieur Fréchette.

We'll start our seven-minute round of questioning with Mr. Peterson.

8:50 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Thank you, Mr. Chair.

Thank you, Monsieur Fréchette, for being with us this morning.

Your report here looks at just the one fiscal year, correct? These numbers are just for the last fiscal year?

8:50 a.m.

Parliamentary Budget Officer, Library of Parliament

Jean-Denis Fréchette

Yes, the last fiscal year.

8:50 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

We see that 44% of it lined up. Is there a problem with getting the proper authority to spend through the supplementary estimates process as opposed to the main estimates?

8:55 a.m.

Parliamentary Budget Officer, Library of Parliament

Jean-Denis Fréchette

I don't think it's a problem with the supplementary estimates; it's a problem with the main estimates. The 44% that you mentioned is interesting, because it was the following year: this year. Last year, in the main estimates, you could see 70% of the spending measures included. The reason is simple; it was a big chunk of money under the infrastructure program. It was easier for the government and Treasury Board to include it in supplementary estimates (A) following the budget. It was not the case the following year, because the infrastructure program was not there anymore, and therefore all these smaller programs and all that were more difficult.

The problem is the beginning of the fiscal year following the budget, with the supplementary estimates (A), where you're supposed to have most of the expenditures that were not in the main estimates.

8:55 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Okay.

The Treasury Board president, Minister Brison, has appeared before this committee on a number of occasions, and he has agreed and admitted that the first step toward improving these processes would be to get the alignment right. I think he referred to it as the “sequencing”. The government has now proposed moving the tabling of the main estimates to April 16 or 18, I think. That will obviously have consequences. The machinery of government will have to change and improve alignment between the budget and the estimates.

Do you agree with his assessment?

8:55 a.m.

Parliamentary Budget Officer, Library of Parliament

Jean-Denis Fréchette

We said in our report analysis that this move from the President of the Treasury Board was laudable. We still mention that. We welcome that. We welcome that for parliamentarians. We work for parliamentarians. But we have some restrictions, or when we observe and then we make the analysis as we did and follow the money document, we can see that it's going to be very difficult. You're talking about the sequencing. We still have to see this sequencing.

It's not by changing the standing order to April 16. Maybe it will help a little bit to give an additional two or three weeks to Treasury Board to make the alignment, but we're not convinced that it will be sufficient. Is it an incentive for Finance Canada and Treasury Board to work more collaboratively, or in better collaboration? We're not convinced of that.

I don't know if Jason wants to add something on this.

8:55 a.m.

Jason Jacques Director, Economic and Fiscal Analysis, Office of the Parliamentary Budget Officer, Library of Parliament

I think the only observation we would make, going back to Jean-Denis' opening statement, is that the government attempted to do precisely this in 2007 and 2008 with the creation of the spring supplementary estimates (A). Largely it's been a failure over the past 10 years. We've asked where the plan is, how are they actually going to implement things differently in comparison to the past and address those failures, but nothing has been forthcoming at this point.

The only other observation I'd make is that if Minister Brison and Minister Morneau cannot currently direct their officials to work together more effectively, I think there's an open question regarding to what extent Parliament is in a good position to place additional pressure on those two government departments.

8:55 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Do you see as part of the problem, then, that Finance and Treasury Board are not working in alignment, in conjunction?

8:55 a.m.

Director, Economic and Fiscal Analysis, Office of the Parliamentary Budget Officer, Library of Parliament

Jason Jacques

That's precisely the observation we made, and have been making over the past eight months, that the problem does not rest within Parliament but rather within the government and within the public service itself. Until they actually fix those internal processes and until Parliament actually sees a plan to fix those internal processes, changing the Standing Orders of Parliament is potentially the wrong direction to be going in and the wrong thing to be focusing on.

8:55 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Okay.

Mr. Fréchette, have you had a chance to review the new departmental results framework or the departmental results reports, or the concept, if not in any detail? Do you think it's an improvement on the way things operated in the past?

8:55 a.m.

Mostafa Askari Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament

Well, relative to the current system, I think anything would be an improvement. There is a performance architecture within the government. They are always trying to improve that. What we have observed in the past is that the way that was managed and the information that was provided was not very useful. We did a study a couple of years ago, in which we looked at the performance indicators. We tried to figure out how they are being used, and whether there is any link between those performance indicators and the changes in expenditures for various programs. We couldn't find any link between those two. We saw that programs that were not actually performing well were given more money, and programs that were performing really well saw their budget reduced.

So it wasn't really clear how the government was using the indicators. Right now they are trying to improve that, and we have to see if it is a better system. Certainly that would be welcome.

9 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Okay.

How's my time, Mr. Chair?

9 a.m.

Conservative

The Chair Conservative Tom Lukiwski

You have a little less than a minute.

9 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Okay.

I read your report, and in one of the tables was a comparison to other jurisdictions. Is there an ideal jurisdiction that you see out there? Is there someone we should be trying to mimic more than others, or do they all have some merits and some not-so-good aspects?

9 a.m.

Parliamentary Budget Officer, Library of Parliament

Jean-Denis Fréchette

To quote the President of the Treasury Board, Australia is a model to follow. He also mentioned the Netherlands, but Australia is probably one of the best examples. Over there, both treasury and finance work really closely together. They're moving together. Their collaboration is clear. They table their budget and estimates at the same time. Of course, it's a different culture, and we have to understand that. So we're not there yet.